JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS díospóireacht

Scrutiny of EU Proposals.

Chairman

We are present to scrutinise EU legislative proposals. I propose that we take the items in the order set out on the agenda, starting with the Commission's proposals in COM [2002] 443 relating to consumer credit. Written briefings on this item and on item B were circulated prior to the original scheduled dates of 12 March and 26 March, respectively.

Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. Members who wish to make a declaration on any matter being discussed may do so at the beginning of their contributions.

I welcome Mr. Michael Davitt, Mr. Pat Hayden and Mr. Cathal O'Gorman of the Department of Enterprise, Trade and Employment who will speak to the committee on the proposed directive. I know they were before the committee on 12 March, but unfortunately, we were not able to deal with them on that day. They have ten minutes to explain the proposal and its impact on Ireland. Members then will ask questions. The witnesses are welcome. I call Mr. Davitt.

Mr. Pat Hayden

I am afraid the honour falls to me on this occasion. I thank the Chairman for his welcome.

This directive will replace a similar one from 1987 which was given effect in Irish law in the Consumer Credit Act 1995. The Commission has recognised the growth in credit. In the 1970s, exchange was predominantly by way of cash transaction. In the 1980s, consumer credit arrangements of different kinds came into vogue. That has continued to be the case in the 1990s and up to now.

The 1987 directive required member states to introduce only a minimalist regime. In that sense, some member states, in recognition of developments in the credit market over time, took account of that and changed their systems accordingly. At this point, there is a patchwork of legal provision relating to consumer credit across the different member states of the European Union.

This directive has been advanced by the Commission, but primarily in consultation between Commissioner David Byrne, with his interest in consumer affairs, and Commissioner Bolkestein, with his interest in the completion of the Single Internal Market. Accordingly, it seeks to address the twin issues of protecting consumer interests in credit terms in a contemporary situation and getting rid of the current reticence relating to cross-border credit transactions, which are minimal. The scale of credit in the European Union can be assessed from the point of view that, in the euro zone at this point, in excess of €500 billion is advanced in credit and this is growing by the rate of 7% per year.

That is the broad background that has given rise to the amendment of the 1987 directive and the proposal before us. Apart from the Commission's interest in bringing the regime up to date, it consulted widely with member states and other interests in the course of 2001. It represented the outcome of that consultation as pointing it to act in a number of areas.

The first was to redefine the scope of the directive to reflect contemporary developments and current arrangements in the consumer credit markets. The second outcome of the consultation which it saw as being required was that there would be a register of those providing credit in all member states and that there would be a register of credit intermediaries. At this point, we in Ireland have a register of credit intermediaries; we do not have a register of entities providing credit generally.

Another outcome of the consultation has been that credit providers would have an information source, that they would have access to information that would allow them to assess properly the credit worthiness of those seeking credit. In addition, from the point of view of consumers, there is a recognition that full information on all aspects of contracts for consumer credit should be provided to consumers and, at the same time, to people who would intend to go guarantor for the credit provided.

This is underpinned by a primary concern in the directive which focuses on responsible lending. There is a recognition that irresponsibility on the part of either the credit provider or the consumer is leading to distortions in the market. If a set of rules can be applied across the member states of the European Union, competitiveness will be improved to the benefit of both the credit provider and consumer.

On the consultative process, the need to put in place or update arrangements for resolving problems where credit default arises was recognised and finds expression in this draft directive.

I have indicated the background to the directive being brought forward and the type of issues raised in the consultative process with the member states and other interests in advance of the directive having been adopted by the Commission. I want to run briefly through central issues that reflect these concerns that are to be found in the directive.

It reshapes the rules for consumer protection and harmonisation and there is particular interest in the issue of harmonisation across the European Union to encourage cross-border credit transactions, particularly in the context where e-commerce is now being regulated at a Community level. As of now, as with cross-border purchases of goods or services, cross-border use of credit facilities is very limited and has not shown any signs of significant growth in recent times.

The second point is that home loans are excluded from the ambit of this directive. They did not feature in the earlier directive either and they are not included within this directive. On house mortgages, the Commission has a voluntary code of practice where there is voluntary co-operation, and there is a European Union recommendation which only recommends and is not prescriptive.

Chairman

When you say home loans, does that mean house loans?

Mr. Hayden

Yes, and house mortgages. The draft directive specifies the detailed information to be provided to consumers by creditors, both in terms of the direct and associated costs, so that all the different elements are clearly understood in advance of a consumer entering into a contract.

From the point of view of lenders, again in the context of what I have said about the primary aim of encouraging responsible borrowing, there is a requirement to have detailed information that would allow an assessment to be made of those seeking credit so that those who have defaulted in the credit area in the past will be discouraged from continuing to do so and, equally, those who have met credit obligations will be advantaged in terms of speedy agreements.

Consumers will now have 14 days within which to withdraw from a credit agreement without obligation of any kind, so they can reflect and have a cooling off period of 14 days. If they want to go ahead with a contract at that point, they may do so. There is also a concept of joint and several liability where the creditor and supplier of goods can be held accountable where those goods are not delivered or are not delivered in the way the contract to purchase suggested they should and are deficient in one way or another.

The draft directive also provides for a register of creditors and credit intermediaries. This is, again, an issue that had surfaced in the consultative arrangements into which the Commission entered before advancing the draft directive.

This draft was advanced in September of last year and negotiations on its content commenced under the Danish Presidency. It will be adopted eventually by qualified majority voting and is the subject of a co-decision procedure involving both the European Council and the European Commission. At this point, under the Greek Presidency, it has had its first reading and is into its second. Theoretically, there is a possibility that it could be agreed in the near future but with 36 articles in it, the range of issues it covers and the potential for technical argument about rates, information to be disclosed and so on, the likelihood is that it will take considerably longer. Our expectation is that it probably will not be adopted in the course of this year but it may be in the course of next year. It is the kind of instrument that has the potential to remain under discussion and negotiation for some time.

The two primary motivations for advancing it are the protection of consumers in relation to credit and harmonisation of laws across the European Union, which will enhance competitiveness in the interests of all parties. They are two general principles with which we agree. It will have implications for the existing Consumer Credit Act 1995 and changes to reflect the increased emphasis on responsible borrowing and the kind of components that have to be put in place to facilitate that will have to be made to the 1995 Act.

That, in summary, is a brief description of what the draft directive contains. It will probably take some time to be adopted. It will be adopted by the co-decision procedure by majority voting within the Council. Our overall attitude towards it is supportive, but there are issues with regard to specifics which this country and many others will require to have resolved to everybody's satisfaction.

Chairman

I thank , Mr. Hayden. He said that consumer credit is running at €500 billion a year, or a 6% growth rate. How does that compare with each year for the past ten years? Is the harmonisation of rates the same for the UK as it will be for countries that are members of the euro currency?

The 14 days withdrawal proposal is good. If contracts are not legal for 14 days, does that mean the borrower will not receive any of the borrowings until the 14 day period has elapsed?

Mr. Hayden

With regard to the Chairmans first questions, I am not in a position to give him the movement over ten years.

Chairman

Well, say, in the past four or five years.

Mr. Hayden

I have just taken this figure from the Commission's assessment paper. I do not have comparative figures for other years.

In respect of the determination of rates, it is not intended that there would be a uniform European Union rate for credit facilities. That would be a matter for the money markets of individual member states. The aim is transparency for borrowers in being able to contrast the rates that apply in the different member states and the facility to shop across borders, which would be of more direct application in continental Europe than elsewhere.

The provision in Irish law at present takes account of a right of withdrawal of ten days. It will be an increase on that. I have not directly participated in discussions on this matter in the Council, but I understand there has not been a significant reservation on this proposal by the representatives of the member states.

Chairman

It seems reasonable and sensible.

Deputy Lynch

I thank Mr. Hayden. His briefing was understandable, which is more than can be said for many directives and briefing notes. I welcome him to the committee. It is good to have people come to the committee to discuss these issues. This directive will have a direct bearing on every individual in the State.

The Chairman asked about the figures. The Irish League of Credit Unions was very upset about figures which were released after Christmas on credit card debt. The figures showed that, in a five year period, 850,000 credit cards had come into operation in the State and that the debt incurred by them had doubled in the same period. It is significant that we probably have a higher use of credit cards and mobile phones and the highest home ownership in the European Union. That makes us unique and it is why this directive will impact on us more than others and why we need to be extraordinarily careful about it.

This committee has a difficulty in assessing legislation and directives because we have so much of it. Am I correct in believing that our own Consumer Credit Act is far more wide-ranging than is envisaged in this directive? I accept the cooling off period will be increased from ten to 14 days, which is good. I suppose we will eventually increase it to 28 or 31 days, which is the case in other jurisdictions.

We probably have the highest home ownership in the European Union, with the United Kingdom probably next in line. It would be a backward step for us to have home loans and mortgages excluded from the directive. They are covered under our legislation and we should not draw back from it. I know things are at a very early stage. Am I correct in believing there is no date for implementation?

Mr. Hayden

No.

Deputy Lynch

We should argue very strongly for mortgages and home loans to be included in the directive. We should also argue strongly for the type of information that comes with credit cards to be clear and jargon free. What does the APR, for example, mean in real terms? We should be given examples of interest rates so that people realise that if they do not clear their credit card debt within a certain period, they will be penalised severely. Those issues must be dealt with. We will have to ensure they are covered in the directive. We should not water down our legislation to comply with an EU directive.

We cannot properly operate in the Single Market unless we have some kind of harmonisation. This should have been dealt with at the outset. The level of competition it will bring in respect of finance, access to credit and availability of credit for certain items is good.

The existing restrictions are damaging the market and are not good for the consumer. It is good in parts, but I am concerned the outcome may be a directive that is not as good as what we have in place. We are in a unique position within Europe because of our home ownership rate and mortgages and home loans should be included.

Mr. Hayden

My colleague, Cathal O'Gorman, will take up some of those points. Mr. O'Gorman represents the Office of the Director of Consumer Affairs. I did not mention it up to now because I did not want to indicate that we were passing the buck on this too soon, but this responsibility will shortly transfer to the Irish Financial Services Regulatory Authority and political responsibility for this issue will come under the ambit of the Minister for Finance. That should happen with the signing of the commencement order for the IFSRA which, I understand, is about to be done and the change may happen as early as next month. Had this meeting been deferred to another time we may not have had to come here and the joint committee may have had other colleagues before it.

On the question of watering down our legislation, that is not a requirement. The APR exhaustive examples are shown in the text here and perhaps Mr. O'Gorman will elaborate.

Mr. Cathal O’Gorman

I am from the Office of the Director of Consumer Affairs which is the body responsible for administering our Consumer Credit Act. Having attended some of the committee meetings at Commission and Council level I know the issue of debt is of concern to the Commission. It is for that reason there are specific articles in the draft directive which deal with issues of responsible lending and responsible borrowing. If the directive is transposed as is, a new concept will be introduced whereby lenders will be required to act responsibly, but, in the same vein, so will consumers. We hope through that responsible activity the issue of debt, which I accept is of concern to the Commission, will be addressed.

I do not have figures on the level of debt, but it is no secret that the committee has had missives from an august body such as the Central Bank which clearly indicate we have gone from a nation of savers to a nation of borrowers and we are carrying unprecedented levels of debt which may arise from credit cards or other products. Clearly, we would hope, with the passage of these articles, that the issue of responsibility on both sides will be a reality.

On the question of the Consumer Credit Act, clearly it is more encompassing than what is proposed in the directive or what was in the existing directive. The Act deals with issues such as the regulation of bank charges - an issue that is not proposed to be dealt with in the directive - and housing loans, which the Deputy mentioned, is an issue over which we have a competence and is not sought to be dealt with under the proposed directive. Our legal advice is that where the directive does not seek a competence in a particular area, there is no need for a member state to change its national legislation. We would be happy if the directive stands as is that the statutory protections that are provided with regard to housing loans under the Consumer Credit Act can remain. I hope that gives some comfort.

There is a distinction between the two directives in that the forthcoming directive will be a maximum harmonised directive, beyond which member states will not be able to go. Clearly, that will relate only to areas where the directive seeks to have a competence and housing loans is not one of them. In the true sense of the form, someone borrows some money to buy a house. Clearly, there are other aspects of housing loans where someone would seek to avail of the equity they have built up to do something else, perhaps a lifestyle issue, or they may wish to travel the world or whatever but that is a different matter. Under the directive as it stands, the proposal is that they would be covered. I hope that clarifies the position.

The Consumer Credit Act contains certain examples of APR. It is a very complicated formula and it would be beyond me to explain its intricacies to the joint committee. All I would say is that the APR is intended to be a measure of all the charges a consumer must pay in respect of a particular loan. For that reason it has gained a stature throughout Europe as the measure by which one can make a comparison. If one was seeking to obtain a loan in Ireland where the APR was X and the rate was Y - more favourable - in another member state, the intention of the directive is that one could avail of the Y rate in that member state.

The one difficulty is that the directive also proposes to introduce a new concept of a total lending rate. The total lending rate is different from the APR in that it relates to the charges imposed by the lender. If, for example, there is a tax that goes along with that, it will not be included in the total lending rate. We have certain qualms in regard to the introduction of this new concept because we think it will confuse consumers. If there is an advertisement for credit and two or three rates are shown, that does not help transparency.

On the question of access to credit, one of the Commission's motivations here is that by opening up the borders and by encouraging lenders to go outside their borders, people will have more choice, more competition. The Commission is disappointed this has not happened yet, despite the introduction of the single currency. The intention, therefore, is that by introducing a fully harmonised measure via this directive that will enable this to happen.

Deputy Lynch

I thank Mr. O'Gorman for his response. I agree with his last point about opening up the market and perhaps it should have been done before now with EMU and the single currency. If people are to be encouraged to go outside their traditional boundaries to seek a home loan or a mortgage they will leave behind a protection they have at home and that will be a difficulty. I agree with Mr. O'Gorman on the APR that it is a good and recognised measure. However, it is difficult to apply when one's credit is on a month by month basis as is the case with credit cards. At the end of the day, it would be helpful if there was a more understandable mechanism of presenting it. For example, if one's borrowings on a credit card were €1,000 and if allowed to run over, one would be liable to a charge. That would be much simpler. From a consumer point of view, it is important that it be as open as possible.

One may say the consumer has a right to argue that the lender did not know his or her client and, therefore, should not have loaned the money. On the other hand, the lender always has the fall-back position of never again lending anything so that people are not inclined to argue. It needs to be as open and understandable as possible.

Deputy C. Lenihan

A number of questions arise here. On the decision to extend to 14 days the cooling off period, I am not clear why we would move from ten days. Is it still possible, within the ambit of this directive, for a person to transact a loan in a short period? From my experience, this is very much a demand that one gets in business. People sometimes want a business transaction involving a loan to go through at speed. Does the business person have the right to waive the cooling off period if that is agreed between the contracting parties to the loan? In other words, can two contracting parties waive the right to have this cooling off period and progress the legal documentation and agree the loan in a shorter timeframe than the 14 days, as that could represent an inhibition to certain transactions in business? Is there a danger that we may be adding to the documentation problem that already exists for people seeking loans? We all know and value what the Consumer Credit Acts have done, but there is a danger that we will be imposing an information overload both on the client and the provider of the loan. Ultimately, people taking out a loan have to be wary.

Is there a danger that we are imposing on the lender a problem whereby costs that are not borne by the lender will now have to be shown, even though the lender might not have access to the information that would allow them to show this in a proper way when giving a loan? The problem arises where insurance is required for a loan of a certain amount because of the circumstances of the person who is borrowing. That insurance may be sourced other than through the insurance policy provided or offered by the lender. That may be somewhat unfair. How can a lender decide the true cost if the borrower takes out insurance elsewhere?

I have some concerns about the concept of the TLR and the APR. We need to go for one or the other. In the interest of the consumer there needs to be clarity on what is being charged here rather than introducing a separate and perhaps a more complicated benchmark against which people try to make comparisons.

Deputy Callanan

I generally welcome the Bill, which offers protection for consumers. Cross-border competition has to be good for the borrower. Mr. Hayden has said that those providing credit will have to be registered. He also said that those borrowing will have access to information on those providing credit. Can Mr. Hayden elaborate on the type of information?

Home loans should be left as they are because they represent personal borrowing. I hope the process of hire purchase will be fully controlled. At one time it was possible to borrow at an initial rate of 5%, but end up paying 55% or 60% on the last payment.

Mr. Hayden

I will answer the questions of Deputy Lenihan and Deputy Callanan as far as I can and then Cathal O'Gorman from the Office of the Director of Consumer Affairs may want to speak. The 14-day proposal comes from the Commission and seeks to harmonise procedures across the European Union. There is a disparate range of provisions at the moment. In Ireland it is ten days and in many other countries it is seven and in some it is something else. This represents an upward adjustment from what is available at present. In some places, the provision is much less than we have here.

The issue of waiving the right to a cooling off period is not expressly stated in the text of the directive, but it is of concern based on the consultation process that has taken place here. It is an issue that has been indicated as being of concern in the discussions on this proposal in Brussels, so it is on the table.

There is a possibility that all the requirements here will increase the level of documentation. Concerns have been expressed at the Commission about the different lending rates that are proposed to be explained to borrowers. If the objective is to give the borrower access to understandable information and to facilitate responsible lending on the part of the lender, that outcome clearly would not be one that could be envisaged.

The proposal, at present, seeks to identify the whole range of costs that might arise. Deputy Lenihan mentioned insurance costs, which are instanced. Clearly, there can be problems in identifying the specifics of insurance or something of that kind for an individual borrowing transaction. That is also an issue where scope for greater clarity in the proposal and greater rationalisation exists.

Mr. O’Gorman

Deputy Callanan was concerned about the director seeking to have a register of credit providers and the information that would be gathered by those credit providers. The director is careful to say that where information is gathered it is without prejudice to rights under the data protection legislation. Clearly, the information about which we are talking would be gathered by the Irish Credit Bureau, which is a credit reference agency.

The normal procedure for someone lending money, that is, the lender, is to carry out a check with the Irish Credit Bureau to have regard to the person's credit history. The directive requires them to do that in order that they show that they have engaged in responsible lending. However, lest there be any concern that there would be misuse of the information, the directive takes care to ensure it is without prejudice to the rights people have under the data protection legislation. That is a specific requirement.

I have explained the issue of home loans and the advice we have that the directive as it stands would not require any amendment to the Consumer Credit Act in so far as it relates to pure housing loans.

Mr. Vincent Madigan

I thank the, Chairman. My colleague, Seán O'Flaherty, will make the opening statement. He is the person from the Department who has been intimately involved in the negotiations on the proposal to date.

Mr. Seán O’Flaherty

First, I will try to put this proposal for a directive on takeovers in context. All member states, with the exception of Luxembourg, currently have their own takeover codes which set out the procedures and rules on how takeovers of listed companies in their jurisdiction should be conducted and supervised. In Ireland, the takeover code is enshrined in the Takeover Panel Act 1997, which is implemented by the Irish Takeover Panel, a statutory body provided for in the 1997 Act.

The directive, if adopted, would require member states to absorb into their takeover codes certain common features. These features consist of certain general principles and a limited number of minimum requirements. Therefore, what is envisaged in this directive is a limited level of harmonisation, allowing member states to have more stringent or additional requirements provided, of course, the minimum requirements of the directive are complied with and that the additional requirements are in line with the general principles of the directive.

Why do we need a directive? The Commission sees this proposal as an important component of its action plan for completion of the Internal Market for financial services by 2005. The Commission considers that the level of harmonisation proposed in the directive is needed to strengthen the legal certainty of cross-border takeovers in the interests of all concerned and to ensure protection of minority shareholders in the course of such transactions. In the Commission's view, differences which currently exist between takeover codes in member states act as a constraint, at least, on the effective achievement of these objectives.

Before going on to outline the provisions of the directive in more detail, I will give a brief historical background to the proposal. There have been two previous attempts at having a directive on takeovers adopted prior to the current one. The first was as far back as 1989. This took the form of a detailed harmonisation measure which failed to command support and was subsequently abandoned by the Commission. The second proposal, in 1997, was a much less ambitious measure in terms of the level of harmonisation envisaged. This proposal was the subject of detailed negotiation over an extended period and a compromise was finally agreed unanimously at Council.

However, this was rejected by the European Parliament on a tied vote in July 2001. The Parliament's main concerns were the lack of a level playing field for European companies facing a takeover bid, the need for a common definition of equitable or fair price to be paid by a bidder in a mandatory bid situation and the need for a squeeze-out right, whereby a majority shareholder could require the remaining minority shareholders to sell their securities on specified terms. Following that rejection by the Parliament, the Commission appointed an expert group to examine the Parliament's concerns. This group reported to the Commission in January 2002, with recommendations on how these concerns should be addressed. Taking broad account of the expert group's recommendations, the Commission's latest proposal, published in October 2002, is what we are now concerned with.

I will now give a brief outline of the main proposals of the directive. As indicated at the outset, the proposal, which applies to listed companies, consists of certain general principles and a limited number of minimum requirements. The principles are set out at Article 3 and largely reflect what we have in our own takeover code. The minimum requirements are set out in subsequent articles and many of these are broadly in line with what we have in our code.

The main requirements of the directive are as follows. In respect of cross-border bids, Article 4 provides for the means of determining which competent authority will be responsible for supervising the bid and which member state law will apply. To ensure that minority shareholders are protected, Article 5 makes it mandatory on a bidder, every time they acquire control of a listed company, to address a bid to all holders of securities at an equitable or fair price. Articles 6 to 8 ensure a basic level of disclosure and information relating to the offer, thus guaranteeing transparency during the bid. Article 9 asserts an important principle that the board of the offeree company must have the approval of shareholders for defensive measures the board may wish to take against a bid and this approval must be given after the bid is announced.

Articles 10,11,13,14,15 and 17 are completely new provisions compared to the 2001 proposal. Articles 10 and 11 deal with the level playing field issue. Article 13 deals with information and consultation of employees. Articles 14 and 15 deal with squeeze-out and sell-out rights in a situation where the majority shareholder has acquired a specified percentage of the securities, while Article 17 deals with the limited application of the so-called committee procedure. Essentially, the committee procedure involves formally delegating to the Commission the power to make implementing rules relating to provisions of the directive to apply uniformly across member states.

Of the new provisions, compared to the 2001 proposal, the level playing field is by far the most contentious. It derives from the fact that, in various member states, legal defensive measures are available to companies to use particularly in the case of hostile bids. These mechanisms can be used as an instrument to maintain control over a company and thus hinder hostile bids or, at the very least, make them more difficult. The belief is that such mechanisms do not apply uniformly across member states, thereby giving rise to concerns in some member states that their companies would be more vulnerable to takeover, compared to similar companies in other member states which would be perceived to have disproportionate anti-takeover devices available. Articles 10 and 11 of the new proposal represent the Commission's response in this area.

Article 10 provides for greater transparency by requiring listed companies to publish, in their annual reports, specific information relating to the defensive mechanisms they have put in place and to provide a separate explanatory report on these matters to the AGM of shareholders. Article 11 provides for the so-called breakthrough rule, the purpose of which is to neutralise during the bid and to dismantle, if the bid is successful, at least some of the most common pre-bid defensive measures that can be regarded as hindering bids. Under the Commission's proposal, this rule would apply to restrictions on the transfer of securities, such as the imposition of a ceiling on shareholdings or restrictions on the transferability of shares, and restrictions on voting rights, such as restrictions on the exercise of voting rights and deferral of voting rights, provided for in a company's articles of association or in agreements between the company and third parties or between shareholders.

The negotiations at Council commenced in November 2002 under the Danish Presidency and have continued under the Greek Presidency. Discussions so far have focused on the new elements of the proposal to which I have referred. Some changes have been made to the text in the meantime and their extent is set out in the latest presidency compromise text which we circulated with an explanatory note.

While nothing is agreed until everything is agreed, good progress is being made on building consensus on a number of the new elements of the proposal. The key outstanding issue is the level playing field, but the latest presidency proposal on this is designed to break the deadlock. This proposal goes further than that of the Commission. Under the presidency proposal, so-called multiple voting rights, that is, where a security can have more than one vote, would also be made unenforceable in a takeover.

This proposal is in response to a blocking minority of member states, led by Germany, that considered the Commission's proposal for Article 11 as not going far enough towards addressing the level playing field issue. Multiple voting rights were abolished in Germany and that is its justification for adopting this approach. The proposal is being opposed vehemently by the Scandinavian countries, where the multiple voting rights are widely used. Nevertheless, the presidency hopes it will be able to command a qualified majority at the Council for its latest proposal. Its plan is to secure political agreement on the dossier before the end of its term of office.

When the State is the owner, such as is the case with the TSB, is there any protection for customers of 60 years?

Mr. Madigan

The directive deals with companies which are listed on the stock exchange. The TSB is not, so that would not arise.

Deputy Lynch

There is no protection for the poor customers of the TSB.

Senator Hanafin

What are the implications for a foreign buy-out and domestic buy-out, for example, in the cases of Sherry Fitzgerald, Scottish Radio Holdings buying radio licences and the print media and the potential takeover of First Active by a domestic company? Is there any change other than we have already seen in current legislation?

Mr. Madigan

In the first instance, it does not arise because it is not a listed company. In the second and third cases, the existing regime will continue to operate. The point I mentioned in respect of Deputy Conor Lenihan's question on media is that there are other controls which operate under competition law and they will continue to operate. They are separate from the takeover law.

Chairman

I thank Mr. Madigan and his colleagues for assisting us in our deliberations.

The joint committee adjourned at 3.55 p.m. until 9.30 a.m. on Wednesday, 9 April 2003.

JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS díospóireacht - Wednesday, 2 Apr 2003

Scrutiny of EU Proposals.

Mr. Pat Hayden

Mr. Hayden

Mr. Hayden

Mr. Hayden

Mr. Hayden

Mr. Hayden

Mr. Cathal O’Gorman

Mr. Hayden

Mr. O’Gorman

Clerk to the Committee (Mr. Richard Manley)

Mr. Vincent Madigan

Mr. Seán O’Flaherty

Mr. O’Flaherty

Mr. O’Flaherty

Mr. O’Flaherty

Mr. Madigan

Mr. Madigan

Mr. Madigan

Mr. Madigan

Mr. Madigan

Mr. Madigan

Mr. Madigan

Mr. Madigan

JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS díospóireacht -
Wednesday, 2 Apr 2003